HomeIndustry NewsAP's IT industry continues to pin hopes on long due incentives

AP’s IT industry continues to pin hopes on long due incentives

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Despite repeated assurances from Gov. nothing has yielded

One of the key issues of the state’s IT industry has been the release of their long pending IT incentives which are due to the industry.

However, despite repeated assurances from the state government on releasing these much-needed incentives to the IT industry nothing has yet been done.

In fact, just a few months ago too there was another reassurance from the government to release the long pending incentives to the IT sector but nothing has yielded.

As per industry veterans there is an estimated Rs 70-80 crores due as incentives to various IT firms in the state.

To be fair these incentives have been pending for release since the previous government’s tenure.

Nonetheless stakeholders from the industry assert that despite resubmitting and refiling the proposals for incentives multiple times (as per new policies), their efforts have gone in vain.

Year after year, it has only added to disappointment and most of them say that they have lost hope.

A few industry insiders shared that they were initially given approvals in writing on the eligibility for the incentives.

However, on approaching the officials to check the status quo of the pending incentives or on resubmission of the proposal, they learned that their application had been removed without even giving notice. 

‘It has been disheartening and a lot of companies have moved out of Vizag’ said a senior IT executive of an IT firm on the condition of anonymity.

AP is a soaring state and the IT industry contributes in generating revenue and employment for thousands of people. However, not even a fraction of support is coming in from the government he said.

“The government had announced special incentives for hiring local talent. A lot of assurance had been guaranteed; however, it has remained only in words and nothing in action. 

All the training costs and other expenditure has been borne by the company itself,” shared another executive of an IT firm adding that five years ago, the local talent pool was less than 50 percent and now it is more than 75%.

There was a lot of buzz about releasing the incentives when the old IT policy was replaced with the new IT policy in 2021.

However, it has remained only an ‘Empty talk’, at a time when the government made statements on maintaining the integrity of companies to ensure incentives reach the right one the executive opine.

The industry also informed that many of the IT companies are not fully aware of the new policies/ rules and have not been notified of all the rules, shared another stakeholder adding that the amount of incentives has also been reduced drastically.

The Ease of Doing Business (EoDB) in the neighbouring state of Telangana is way better than in Andhra Pradesh as incentives are quick and the companies grow exponentially.

Organizations also state that there is continuous pressure from their auditors on when the overdue amount will be released or if they should write it off.

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